Nokia profit drops 66% in Q2

Nokia profit drops 66% in Q2
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First Published: Thu, Jul 16 2009. 04 05 PM IST
Updated: Thu, Jul 16 2009. 04 05 PM IST
Stockholm: The world’s top cell phone maker, Nokia Corp., on Thursday said earnings fell 66% in the second quarter as the global recession sapped demand for handsets.
Net profit was €380 million ($535 million), down from €1.1 billion in the same period a year earlier. Sales tumbled 25% to €9.91 billion.
Analysts polled by SME Direkt had forecast a profit of €327 million and sales of €10.1 billion. Nokia shares fell 8.1% to €10.20 in Helsinki after the report.
The Finnish company, which sells about four in 10 mobile devices worldwide, dropped its target to increase market share this year, saying it expects its share of the mobile market to remain unchanged from 2008.
Nokia CEO Olli-Pekka Kallasvuo said the company “put in a solid performance in what was another tough quarter.”
Its global market share climbed to 38% in the second quarter, from 37% in the previous three months, but was still down from 40% a year earlier.
“We are balancing short-term priorities with our longer-term growth ambitions as elements of the mobile handset, PC, Internet and media industries converge to form a new industry,” Kallasvuo said in a statement.
“Consumers will increasingly expect devices and services designed as integrated solutions. To capture this opportunity we are accelerating our strategic transformation into a solutions company.”
Mobile phone sales have dropped off sharply in the economic slump.
Global shipments fell 13% to 245 million units in the first quarter, the sharpest annual decline since the mobile phone industry started in the 1980s, according to research firm Strategy Analytics.
Though market leader Nokia has weathered the crisis better than some smaller competitors, it has been forced to cut thousands of jobs because of falling demand and lower handset prices.
A household name in Asia and Europe, Nokia is a smaller player in the United States, where its smartphones face tough competition from Apple Inc. and Research in Motion Ltd., the makers of the iPhone and BlackBerry.
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First Published: Thu, Jul 16 2009. 04 05 PM IST